Affording old age: the EU pensions debate. Generation M(obility) Buying social: building the social into public procurement. ISSUE N 25 November 2010

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1 ISSN: ISSUE N 25 November 2010 Affording old age: the EU pensions debate Generation M(obility) Buying social: building the social into public procurement The European Commission s magazine on employment and social affairs

2 EDITOrial Europe s population will age dramatically over the next 50 years. The latest demographic projections reveal that a further rise of about seven years in life expectancy could materialise by We should celebrate the fact that people are living longer. It is a great human achievement especially as we are fitter for longer. The problem is that behind the baby boom there is a baby bust. Europe is facing the dual challenge of an ageing population with an increasing number of pensioners, and a shrinking workforce. Recent forecasts have predicted that the European workforce will shrink significantly from as early as And as the baby-boomers (people born between 1946 and 1964) retire over the next two decades, the burden on the state will rise sharply. The looming pension crisis has proven an effective catalyst for reform across the European Union. Over the last 15 years consecutive waves of member State reforms in response to the challenge of ageing have markedly altered pension systems and pension scheme designs across the Union. Now, as the Lisbon process is being replaced by the Europe 2020 strategy, it is time to take stock of the progress made. With the financial crisis and the economic downturn, member States need to revisit achievements and re-assess core responses in the light of the shortand longer-term impacts on the various elements in their pension systems. To support them in their endeavours, the European Commission has launched a European debate based on extensive consultation of all stakeholders. The green paper Towards adequate, sustainable and safe Focus On: Europe is facing the dual challenge of an ageing population with an increasing number of pensioners and a shrinking workforce. European pension systems seeks to obtain their views on the key challenges facing pension systems and on how the EU can support member States efforts to deliver adequate and sustainable pensions. In this edition s Special feature, which begins on page 15, we take a closer look at the unfolding of the EU pension debate and we examine current trends in pension reform. From those nearing retirement to those who are about to enter the labour market: the lead article on page 7 is devoted to the most recent EU initiative to enable young people to find employment. Youth on the Move sets out a series of actions to help young people gain the qualifications they need to succeed in the jobs market. With youth unemployment currently standing at nearly 21 percent as a result of the crisis, co-ordinated action at EU level is necessary to help ensure Europe s future prosperity. The challenge of reducing youth unemployment in the EU and the action necessary to respond to it are also addressed in our regular interview, this time with Xavier Prats Monné, Director responsible for employment at DG Employment, social affairs and equal opportunities. And in our Other voices section on page 26, OECD pension expert Edward Whitehouse discusses some of the key issues national governments will need to tackle in order to ensure that their national security systems stay strong and affordable. Robert Verrue istock Van Parys Media Affording old age: the EU pensions debate As Europe braces itself for the silver tsunami, the search is on for the best ways to ensure adequate and sustainable pensions for its citizens. p.15 Generation M(obility) By helping young Europeans to work and study abroad, the European Commission hopes to provide them with the knowledge, skills and experience they need to make their first job a reality. p. 7 Buying social: building the social into public procurement Seventeen per cent of the European Union s GDP is represented by public procurement contracts. It is time to make sure that certain social standards are included in them. p Social Agenda November 2010

3 EMPLOYMENT Contents Generation M(obility) 7 DISABILITY European award for accessible cities 11 GENDER EQUALITY European Commission unveils new strategy for gender equality 13 SPECIAL FEATURE Affording old age the EU pensions debate 15 Common challenges require shared solutions 16 What future for pensions? 18 Main trends in European pension reforms 19 CORPORATE SOCIAL RESPONSIBILITY Buying social: building the social into public procurement 21 HEALTH AND SAFETY AT WORK Less dangerous, more stressful 23 OTHER VOICES Comparable and easily accessible data 26 ITEMS News in brief 4 Interview with Xavier Prats Monné, Director responsible for employment at DG Employment, social affairs and equal opportunities 27 Recent publications 28 Useful websites 28 European Union A magazine providing information on European employment and social policies, Social Agenda is published in English, French and German by the European Commission s Directorate-General for Employment, Social Affairs and Equal Opportunities. Editor in chief: Robert Verrue, Director-General, DG Employment, Social Affairs and Equal Opportunities European Commission, B-1049 Brussels 65,000 copies of this issue were published. Subscription is free on request please contact: European Commission, Employment, Social Affairs and Equal Opportunities DG InfoCentre, B-1049 Brussels, Fax.: (32-2) ; Notice: Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this publication may be put, or for any errors which, despite careful preparation and checking, may appear. European Union, 2010 Non-commercial reproduction authorised, subject to acknowledgement of the source. For any use or reproduction of photos which are not under European Union copyright, permission must be sought directly from the copyright holder(s). Cover photo: Getty Images

4 NEWS IN BRIEF GENERAL Belga Picture Three Europeans in four think that stronger coordination of economic and financial policies among European countries would be effective in fighting the economic crisis, according to the Spring 2010 Eurobarometer, the bi-annual opinion poll organised by the EU. The survey was conducted in May at the height of the European debt crisis and published last august. Seventy-two percent of Europeans support a stronger supervision by the EU of the activities of the most important international financial groups, an increase of four percentage points from the last Eurobarometer in autumn Europeans main areas of concern in the crisis were the current economic situation, unemployment and rising prices. EMPLOYMENT AND EUROPEAN SOCIAL FUND The EU labour market is continuing to stabilise following several months of only relatively moderate deterioration and is now showing the first signs of recovery according to the latest Monthly Labour Market Monitor by the European Commission. For the first time in nearly two years, employment remained unchanged in the second quarter, while unemployment has been falling since May. Overall, the EU labour market may perform somewhat better this year than previously expected, driven by a faster than envisaged economic recovery, although conditions are still set to remain weak for some time. The flagship event for the European Job Days took place at the European Commission headquarters in Brussels on 2 October. It attracted around 10,000 jobseekers and 40 employers. During September and October similar events took place all over Europe, giving jobseekers and employers the possibility of visiting events ranging from recruitment fairs to seminars and lectures on job mobility. On 15 September the European Commission launched Youth on the Move, an initiative aimed at helping young people to gain the knowledge, skills and experience they need to secure their first job. Youth on the Move proposes 28 key actions aimed at making education and training more relevant to young people s needs and encouraging more of them to take advantage of EU grants to study or train in another country. It is hoped that this will increase young people s employability and access to the labour market (see related article on p. 7). The EU adopted new measures aimed at simplifying management rules for the structural and cohesion funds, which include the European Social Fund. The changes should help to facilitate access to the funds and accelerate flows of investment at a time when public budgets are under pressure. As part of the measures to counter the economic crisis, additional advance payments totalling 775 million will be paid out to some member countries to tackle immediate cash flow problems. European Union 4 Social Agenda November 2010

5 WORK ORGANISATION, WORKING CONDITIONS AND SOCIAL DIALOGUE The third annual report on the activities of the European Globalisation Fund (EGF) showed a six-fold increase in applications from member States for funding to support workers dismissed as a result of globalisation and the economic crisis. In 2009, 13 member States submitted 30 applications requesting a total of over 165 million euro from the EGF in order to help almost workers made redundant in 17 industrial sectors a 700% increase on On 30 September EU-level employers and trade unions organisations in the healthcare, education, local and regional government, commerce and private security sectors signed guidelines to help tackle violence and harassment at work. The guidelines aim to cut prevent, reduce and mitigate violence by increasing awareness and understanding of the issue, properly assessing the risks posed by third party violence in different workplaces and job functions; training managers and workers in how to prevent or, if necessary, manage the problem, and setting up policies and systems for monitoring, reporting and investigating incidents and providing support to victims. KE EN-P European Globalisation Adjustment Fund Lost your job? The EGF may be able to help you Directorate-General for Employment, Social Affairs and Equal Opportunities European Commission GENDER EQUALITY On 21 September the European Commission adopted a five-year strategy for promoting equality between women and men in Europe (see related article on p. 11). The strategy aims to make better use of women s potential, thereby contributing to the EU s overall economic and social goals. It translates the principles set out in the European Commission s Women s Charter into specific measures, ranging from getting more women into company boardrooms to tackling gender-based violence. Meanwhile, a new Eurobarometer survey shows 87% of Europeans support EU action to tackle domestic violence. One out of four knows someone who has been a victim of such violence. MOBILITY In July the European Commission adopted a report setting out in a consolidated way the rights of Europeans to live and work in another EU country. The report also provides an update on legal developments in the past decade. Currently, only 2.3% of people in the EU reside in a member States other than their own. However, a new Eurobarometer survey found that 17% of Europeans envisage working abroad in the future and 48% would consider looking for work in another country or region if they were to lose their job. 123RF Social Agenda November

6 PROMOTING AN INCLUSIVE SOCIETY During October the European Commission organized a series of high level events in Romania, focusing on the contribution of EU funds to the integration of Roma. A national event took place on 12 and 13 October in Bucharest followed by two regional events in Cluj on 14 October and Iaşi on 20 October. These events aimed at raising awareness about the opportunities offered by EU funds, promoting their use and improving the impact of projects supported by them. They are also part of a process towards a better involvement of the Roma in the implementation of the EU funds operational programmes. The European Commission has established a Roma task force to assess member States use of European Union funds. The proposal was part of an analysis on the situation of Roma in France and in Europe by EU Justice Commissioner Viviane Reding, EU Commissioner for Employment, Social Affairs and Inclusion László Andor and EU Home Affairs Commissioner Cecilia Malmströ. The Roma task force, which will include senior officials from all relevant Commission departments, will assess member States use of EU funds for Roma integration and identify ways to improve the funds effectiveness. The task force s first findings will be submitted to the Commission by the end of the year. The European Commission has launched a Europe-wide public debate on how to ensure adequate, sustainable and safe pensions and how the EU can best support the national efforts. Ageing populations in all member States have put existing retirement systems under massive strain and the financial and economic crisis has only increased this pressure. The consultation document, a Green paper, poses a series of questions inviting all interested parties to contribute views, opinions and ideas on confronting the pension challenge - one of the biggest facing Europe and most parts of the world today and how the EU can contribute to the solutions (see related article on p. 16) One European in six reports a constant struggle to pay household bills and three quarters believe that poverty has increased in their country over the past year, according to a Eurobarometer survey on the social impact of the crisis published in June. The report marks the halfway mark of the 2010 European Year against poverty and comes after EU leaders agreed to reduce the number of Europeans at risk of poverty and social exclusion by at least 20 million over the next ten years as part of the Europe 2020 economic growth strategy for the next decade. INTERNATIONAL EMPLOYMENT ISSUES The European Commission has published a study assessing the challenges that Ukraine faces in the areas of poverty, social exclusion, pensions and health/long-term care. On the basis of this research and two previously published studies on social protection and social inclusion in Belarus and Moldova, a synthesis report for the three countries will complete this first cycle of the studies on social protection and social Iiclusion in the European Neighbourhood Policy (ENP). Continuing this series the Southern Caucasus region studies for Armenia, Azerbaijan and Georgia, together with a Synthesis Report, are expected to be published in early RF 6 Social Agenda November 2010

7 Youth on the move Generation M(obility) New European initiative to fight youth unemployment encourages working and studying abroad For millions of young Europeans finding a job looks like an increasingly remote possibility. The economic and financial crisis has made it harder for young people to enter the labour market. The number of young people looking for a job has increased from 4 to 5 million since the onset of the financial turmoil, with youth unemployment now at nearly 21% in the European Union (EU). In a bid to help improving the situation the European Commission has launched Youth on the Move, an initiative aimed at helping young people to gain the knowledge, skills and experience they need to make their first job a reality. Part of the EU s new Europe 2020 strategy for growth, Youth on the Move proposes a series of actions aimed at making education and training more relevant to young people s needs and encouraging more of them to take advantage of EU grants to study or train in another country. This will increase young people s employability and access to the labour market. Youth on the Move brings together new and existing measures at EU level and in the member States to create a more effective package of support for young people. According to the EU this is the first single EU-level strategy embracing both education and employment targeting young people. The initiative sets out a series of actions to help youngsters gain the qualifications and skills to succeed in the jobs market. The measures proposed by the European Commission focus on three areas: modernising education and training so that it is more relevant to the needs of young people and employers; supporting learning and job mobility; providing a new EU framework for youth employment. Europe s future prosperity depends on its young people. They represent a fifth of the EU population and their skills and abilities will be decisive in achieving the Europe 2020 goal of smart, sustainable and inclusive growth. European education and training systems differ from country to country, but they are all facing similar problems. At present, too many young people fail to reach their full potential in education and training which then makes it harder Social Agenda November

8 mobility studying or training abroad to gain new skills and experience, and employment mobility moving abroad for work, on a short or longer-term basis. for them to find a job. The crisis has led to a dramatic increase in youth unemployment. Access to the job market is tough, even for those with good qualifications. These challenges call for co-ordinated action at EU level, to improve the quality of education and training so that young people are better equipped for the labour market. Youth on the Move will encourage countries to learn from each other about which policies work and which do not. Some Youth on the Move actions will start very soon. Others involve a longer-term perspective. For example, preparation is now starting for the new generation of post-2013 EU programmes in support of education, training and employment. Working and studying abroad - an investment for the future Youth on the Move brings together new and existing measures at EU level and in the member States to create a more effective package of support for young people. Although existing EU programmes in education and training overwhelmingly target Belga Picture young people (95% of funding under the Lifelong Learning Programme goes to young people, teachers and trainers), this is the first single EU-level strategy embracing both education and employment. A lot of emphasis is placed on mobility, as in moving to another country to study, train or work. Youth on the Move makes a distinction between learning The European Commission has a long history of providing financial support for learning mobility through programmes such as Erasmus, Erasmus Mundus and Marie Curie in higher education, Leonardo da Vinci in vocational education and Comenius in school education. Youth on the Move aims to raise wider awareness of the grants available through these programmes. The freedom to work in another member States is a right guaranteed for all EU citizens. Youth on the Move will introduce new measures to support job mobility in the EU. The Commission will, through Your first EURES Job, provide assistance on the ground, including financial support, to help young people to find job opportunities abroad. Today there are still shortages in some countries or sectors and in other EURES: the European employment service Helping to match people with jobs is an essential part of the role played by EURES the European employment service, which brings together job services across the EU. It provides information, advice and help in finding a job in 27 EU countries, plus Norway, Iceland, Liechtenstein and Switzerland. EURES also has a network of more than 850 specialised advisers who can offer personalised help and advice on the practical, legal and administrative aspects of moving between countries. The EURES portal ( offers a database with direct access to around half a million job vacancies and allows you to register your CV online. The proof of the success of EURES lies in the statistics: more and more employers and employees are using the service. In the past three years, the number of vacancies on the EURES portal has grown by 18%, the number of employee CVs by 12%, and - most importantly - the number of employers by 129%. Every month 700,000 people visit the EURES portal, making it one of the busiest EU internet sites. 8 Social Agenda November 2010

9 regions unemployment is very high. The Commission will encourage small and medium enterprises (SMEs), the largest group of employers in the EU, to offer young people work. In a European single market, the availability of highly qualified individuals with experience of living in different member States is vital for smart and sustainable growth. Experience gained in another country allows people to improve their language skills and develop other capacities, such as dealing with other cultures. These abilities are valuable for their own personal development and future employability. Moreover, a job in another European country can help young workers gain a foothold in the labour market by finding a job more easily, while improving their skills, employability and future employment horizons. At a more general level, job mobility also helps make labour markets in Europe more adaptable, creating more job opportunities and better matching people with jobs. Work or study experience abroad is increasingly valued by employers. Independent studies have shown that having studied or worked abroad does enhance people s employment prospects. More than 40% of employers attach importance to the experience gained from study and work abroad and consider that internationally experienced graduates are likely to take up jobs with high professional responsibilities. This is the key finding of a 2006 study on the professional value of the Erasmus scheme by the International Centre for Higher Education Research and the University of Kassel, Germany. A 2007 study on the impact of Leonardo da Vinci programme for vocational education by Wirtschafts- und Sozialforschung (Kerpen, Germany) found that 58% of unemployed people obtained a job after their training abroad and 34% got jobs with greater responsibility. Getting that elusive first job Putting policies and measures in place to tackle youth unemployment is first and foremost a national responsibility, but all member States face common challenges. To improve the situation of young people, the European commission feels that we need policies that cover the steps young people have to make in the transition from education to work, and that provide support to those who have difficulties in making these steps. Youth on the Move aims to focus policies in a strategic manner to help young people to get the first job and then to progress in their career. The Commission will work closely together with member States to identify policy actions and measures that work to inspire the shaping of policies. There will also be new money available for two actions directly accessible to young people: Your first EURES job will be launched next year as a pilot action to help young people seize the opportunities in the wider EU labour market, and to help companies finding qualified workers, while the new European Progress Microfinance facility will make it easier for young entrepreneurs to access credit. This is important since obtaining a loan has become more difficult after the financial crisis, especially for the younger generation. Finding a job is what millions of young Europeans are most concerned about, said László Andor, the European Commissioner for Employment, Social Affairs and Inclusion. Youth on the Move will create new momentum at EU and national level to improve support for young people so that they can find a job, make a living and pursue their own plans. Social Agenda November

10 ESF in Portugal Eastern promise European Union Porto in Portugal has been a centre of international commerce for centuries and Bruno Texeira is continuing his hometown s tradition. The young entrepreneur set up a consultancy business called Trading EuroPacific in early 2008 to help Portuguese and Asian companies work together. He helps firms to find in Asia the distributors, suppliers and agents that they need to access these new markets and reduce their costs. The cultural differences between the EU and Asia make it difficult for companies to get access to each others markets, says the 29-year-old. I decided to set up a business to bridge both continents. His company, Trading Europe Pacific (TEP consulting) works with Portuguese companies that want to sell to Asian markets and vice-versa, or else find manufacturers and control quality of production. He works with a network across seven Asian countries Indonesia, China, Vietnam, Malaysia, Thailand, Singapore and the Philippines: We cover 50% of the world population. He spotted the niche for his business in 2006 whilst doing a work placement in the Portuguese Embassy in Jakarta in Indonesia as part of the Network Contacto training programme co-funded by the European Union through the European Social Fund. Gaining experience The programme, provided by the Portuguese Institute for Foreign Trade (ICEP), consisted of three months of initial training in the Department of Commerce in Portugal, followed by six months in Indonesia. During his time there, Bruno prepared a report on the Indonesian market and helped Portuguese companies penetrate the market there. The experience has proved vital to Bruno in the work he now does. The placement was very good for contacts, he says. I met decisionmakers and influential people. I found out more about the region and the opportunities in the Indonesian market for European companies. After returning from his stint in Indonesia, he worked in the marketing department of a telecommunications company. However, he had always wanted to run his own company and, together with a partner he had met in Indonesia, he began to plan how to use their knowledge of Asian markets and local contacts to start a business. Trading EuroPacific was established in January The only major problem he has had so far is his age. When people think of a consultant for big companies they are not expecting a young person to come and give them advice, he says. It takes a while to convince them. After I show my knowledge and connections they are impressed, but in the beginning it s difficult. He now counts several large companies as clients and has a network of partners in Asian countries. Planning ahead For the future, he aims to expand his operations to other European countries. I d like to open an office in Barcelona. Spain would be the first step. He is also trying to enter India and has had enquiries from Brazilian and Mexican companies wanting to do business in Asia. However, he wants to get the business firmly established before expansion. We want to wait until we re stronger in Portugal before we move to other countries. It s a step-by-step process. 10 Social Agenda November 2010

11 Disability European award for accessible cities The Access City Award celebrates European cities that promote accessibility for all their citizens For a society based on equal rights, a barrier-free environment is a key to provide its citizens with autonomy, freedom of choice and the means to pursue an active social and economic life. For people with disabilities, elderly people, and those with reduced mobility or other types of temporary impairments, environmental barriers result in a high risk of marginalization, exclusion and discrimination. Accessibility is therefore essential to exercise their fundamental rights and to fully participate in society. The right to education or to engage in work, citizens rights related to voting, access to documents, and freedom of movement, the access to leisure and cultural facilities like libraries, theatres, hotels and restaurants can only be enjoyed by persons with disabilities if their environment - with its buildings and public spaces, transport vehicles and infrastructures, services and sources of information - is accessible to them. Accessibility is a cornerstone of inclusion In a society where many aspects of daily life depend increasingly on technology-based products - ranging from s and the Internet to digital television and e-government new technologies can open real opportunities for integration and empowerment, but also, if accessibility is not ensured, cause even more marginalization. Accessibility is one of the pillars of the EU s disability policy, which aims at the active inclusion of people with disabilities. Since 2003, as part of the Disability Action plan , actions have been undertaken in the areas of the built environment, transport, services, information and communication including new technologies (ICT) and the Internet. The European Disability Strategy will pursue these efforts to prevent and eliminate obstacles and barriers for persons with disabilities and to ensure access on equal basis with others. EU policy on accessibility The general policy is outlined in the EU Disability Strategy Specific provisions on accessibility are contained in EU sectoral legislation such as for transport and electronic communication services. The EU makes also use of a variety of instruments beyond legislation and policy, such as research and standardization, to optimize the accessibility of the built environment, ICT, transport, and other areas, and to foster an EU-wide market for accessible products and services. Furthermore the EU aims to improve the functioning of the assistive technology market for the benefit of persons with disabilities. The Commission promotes also the use of a Design for all approach that benefits a wider part of the population like elderly people and those with reduced mobility. Social Agenda November

12 A new initiative of the European Commission shows its commitment in the field of accessibility. The Access City Award will reward a city s commitment to ensure accessibility in fundamental aspects of city living and to guarantee equal access to rights for everybody, regardless of age or ability. The aim is to recognize cities commitment for accessibility demonstrated through results that are not only tangible, but also sustainable, and through concrete plans for future action. The Access City Award aims to encourage cities to inspire one another to innovate and share best practices. Many solutions for improving accessibility can be seen in those forward thinking cities that are demonstrating commitment and innovation in making the urban environment accessible for all. By means of a friendly competition, cities across the European Union can become role models for one another and stimulate a positive expansion of accessibility initiatives. Persons with disabilities represent approximately 16% of Europe s working age population, and about 70% of them are 60 years or older. In the context of a diverse and aging population, and given the strong correlation between disability and ageing, accessibility is becoming increasingly important for the social and economic sustainability of our society. Making the most of our cities With four out of five Europeans living in towns and cities, Europe is now an essentially urban society and many of the accessibility challenges have to be dealt with in urban areas. Our cities need to provide inclusive environments that enable all citizens to enjoy full participation and to live independently. What is more, improved accessibility makes the urban environment more livable and enhances the quality of life for everybody at all levels of ability and mobility, leading to durable benefits for the cities themselves. Four European cities will be selected as finalists for the Access City Award, and the overall winner will be announced this year for the first time at the award ceremony on 2 December, on the eve of the European Day of People with Disabilities. In 2010 the competition was opened in July and it closed on 23 September. Applications could be submitted by a government authority of a city of over 50,000 inhabitants in a EU country. In each of these countries, national juries made up of representatives of national Disability Councils, national authorities and accessibility experts selected from their national applicants up to three cities as their National Nominees. Thereafter a European jury selected the final four nominees, one of which would go on to among win the award. Criteria for the assessment of Access City Award applications: Scope: applications should demonstrate a global approach and an ambitious vision for the future in tackling accessibility in the city in all four award areas. Ownership and level of commitment: rather than just ad-hoc projects, actions and initiatives are expected to be part of a global strategy or policy framework, with appropriate resources being allocated for their implementation. Impact: the city s policies and initiatives should have a demonstrable impact on the everyday life of the city and people with disabilities, and claims of success should be supported by qualitative and quantitative data. The quality and sustainability of the results achieved are to be shown through sound monitoring mechanisms. Active involvement of persons with disabilities, their representative organizations, and accessibility experts should be ensured in both the planning, implementation and maintenance of the city s accessibility measures. As accessibility is only obtained if implemented in a coherent manner in goods, services and infrastructures, applicants were expected to present initiatives and activities that cover four key areas of accessibility in cities, in a holistic and systematic approach: the built environment and public spaces; transportation and related infrastructures; information and communication, including Information and Communication Technologies (ICT); public facilities and services. In parallel, a second Award - the European Champion for Accessible Cities Award - will be given to a network of cities or an organization that has shown outstanding spirit in championing city accessibility during Social Agenda November 2010

13 European Commission unveils new strategy for gender equality Closing the gender pay gap and tackling gender-based violence among EU priorities for the next five years The European Commission has adopted a new five-year strategy to make further advances in equality between women and men. The strategy sets out a series of actions based around five priorities: the economy and labour market, equal pay, equality in senior positions, tackling gender violence, and promoting equality beyond the EU. The strategy translates the principles set out in the European Commission s Women s Charter into specific measures, ranging from getting more women into company boardrooms to tackling gender-based violence. The strategy for the period builds on past experience. It provides a coordinated framework for the main instruments needed to support gender equality in Community policies, including legislation, policy coordination, financial programmes, partnership and social and civil dialogue. It promotes gender equality in all EU policies as an overarching political goal. It provides a framework of reference for European governments and other stakeholders by defining policy priorities. Previous work by the EU in the area of equality has helped to level the professional playing field between men and women. There are 8% more women in the labour market today than there were in 1998, and young women aged 20 to 24 represent 59% of university graduates in the EU. However, despite these achievements, gender gaps remain. In the economy, women are still not reaching the top positions. Female entrepreneurs make up only 33.2% of the self-employed and women are still over-represented in lower paid sectors. What s more, the pay gap between women and men shows no sign of closing: on average and across the whole economy, women in the EU earn 17.6% less per hour than men. Much remains to be done outside the workplace too. Parenthood affects women s employment chances and women continue to work more unpaid hours than men at home. The frequency and intensity of violence against women remains alarming. A new Eurobarometer survey has shown that in Europe an estimated one fifth to one quarter of all women have experienced physical violence at least once during their adult lives and that one in four Europeans knows someone who has been a victim of such violence. Finally, rigid gender roles continue to influence crucial individual decisions: on education, on career paths, on working arrangements, on family and on fertility. These decisions in turn have an impact on the economy and society. It is therefore in everybody s gender equality The Strategy for equality between women and men : Highlights the contribution of gender equality to economic growth and sustainable development, supports the implementation of the gender equality dimension in the Europe 2020 Strategy and continues to promote reconciliation of work and private life and the sharing of responsibilities between women and men. Mobilises all legislative and non-legislative instruments available to reduce the gender pay gap, and launches new actions to encourage women to enter non-traditional professions. Foresees progress with the participation of women in decisionmaking positions. Announces a comprehensive European strategy to tackle violence against women and proposes an integrated package of actions, including in the field of female genital mutilation. Strengthens the gender dimension of external relations and development policies. interest that gender equality in the 21st century should offer genuine choices for both women and men throughout the different stages of their lives. Social Agenda November

14 ESF in the Netherlands Knowledge is empowerment European Union As a young girl, Khadija Majdoubi dreamed of nothing more than owning her own hairdresser s salon. She realised that dream for a while in her native Morocco, but when she moved to the Netherlands, tragedy struck and her world was turned upside-down. Khadija lost her husband when she was pregnant with twins. The shock was tremendous and her babies were born prematurely. She spent the next few years as a full-time mother, and looking after her friends children. With a family to care for and still adjusting to life in a new country, Khadija had to rely on state aid. With only a basic knowledge of the Dutch language, she had a hard time finding even a simple job, much less starting a new business. The road to recovery It isn t easy raising children on your own, says Khadija. It seemed like everyday was so full, I had no time for anything else. To start with, finding a job was a big problem. At her local social services office, Khadija found out about a free training course for unemployed women, co-funded by the European Union through the European Social Fund. The course helped me realise my dream, starting with improving my language skills, she explains. That was so important, and it helped me to feel better about myself. VONK is a work and education centre for women living in the Zeeburg district of Amsterdam. The programme helps women irrespective of their level of education, experience or origin. It provides information and recommendations and helps them with finding a job, training and obtaining social benefits. More generally, it provides support for integration and well-being. VONK also cooperates with other Dutch and local agencies, with women s organisations and social service institutions. Feeling good about yourself One of the most difficult obstacles faced by women after long periods of unemployment is a lack of confidence. The training course therefore included sessions specifically aimed at building self-esteem and assertiveness. I learned to communicate better, says Khadija, and I understood better how things work when you are opening a business. The first thing I had to do was find a job. I had become dependant on other people. I needed to to get back on my feet. VONK staff actually accompanied Khadija on her job searches, and with support and encouragement from friends and family, she finally got a job at a local hairdresser s. The people I saw about a job were reluctant at first, she explains. I am not from here and I don t look like everyone else, and I was not able to express myself the way I would have wanted. The people at VONK helped me to get my foot in the door. I never thought I would be able to do this Once back at work, Khadija managed to put some money aside. Indeed, she managed to put enough money aside to realise her childhood dream. In April 2009 she opened her own hairdresser s boutique not far from her home in Amsterdam. I was a hairdresser before, she explains, when I lived in Morocco. It s what I love doing and I m good at it. But I never thought I would be able to do this here, to open my own place. Khadija says the ESF-funded VONK training course and individual assistance helped her to find herself, and it s changed her and her children s lives for the better. I m really glad I did the course, she says. It s the reason I m here today. 14 Social Agenda November 2010

15 SPECIAL FEATURE Affording old age Europeans live longer and have fewer children who will pay their pensions? The world is getting older. In most countries, the population is ageing. This inevitably has dramatic consequences for pensions and other arrangements for supporting older people. There are two factors behind the trend. The first is clearly, in itself, good news. People are living longer. At the same time, people are having fewer children. That, too, is arguably good news. It should lead to the global population stabilising, although at a substantially higher level than it is now. Desirable though both trends are in themselves, they create a new problem. There are fewer people of working age for every older person. In other words, who is going to pay for our pensions, not to mention our children s? The answer lies in pension reform, in itself a particularly prickly subject, as recently witnessed by the wave of protests in France over government plans to raise the pension age as part of a wider pension reform. Still, if we want to ensure decent standards of living to our future pensioners, something has got to give. The European Commission is well aware of the need for a considered reflection on the future of pensions. The Treaty on European Union clearly states that pensions fall within the competence of the member States. Nonetheless, in this policy domain, European countries share common concerns and challenges: ageing population, sustainability of public finances, adequacy and modernization of pension systems. This is why, in September 2009, José Manuel Barroso identified pensions as one of the strategic issues for his second mandate as President of the European Commission. The articles that follow examine the actions taken by the Commission to open a debate on this issue in view of developing common solutions, starting with the publication of a Green paper on the future of pensions. We also look at reforms underway in the member States and at how the exchange of experience and best practice can help European countries to shape future policy in this area. Social Agenda November

16 istock Common challenges require shared solutions European Commission Green paper launches debate on the future of pensions The worst economic crisis in decades has aggravated the long-term challenges facing European pension systems, stemming from a rapid ageing of the population potentially putting long term growth prospects at risk. These twin challenges have serious implications for the adequacy and sustainability of our pensions. It has long been clear that a considered reflection is needed on pensions in the European Union (EU): on how pension policy can support Europe s twin goals of economic growth and social cohesion. This is what the European Commission s Green paper Towards adequate, sustainable and safe European pension systems published in July 2010 sets out to do. Representing both a means for a decent life in old age and the reward for a lifetime of work, pension systems must deliver both of these elements to all EU citizens. The Green paper has opened a debate on both the short-term budgetary and longer term structural challenges, asking for views from everyone with a stake in these issues. What will people s pensions look like in the future, given the new economic context and the impacts of the many changes made to pension systems over the past decades? How will our systems stand up to any future crisis, financial or other? The organisation of national pension systems is a national responsibility and the Green paper fully respects this. But EU countries do face common challenges. Different countries can learn from one another s experience and share solutions, something the EU seeks to facilitate. The Green Paper underlines that adequacy and sustainability are two sides of the same coin. If pensions are at risk of being inadequate, there may be pressure for ad hoc increases in pensions or higher demand for 16 Social Agenda November 2010

17 other benefits, jeopardising sustainability. Equally, if a pension system is unsustainable it will prove to be inadequate in the long run when sudden corrections are needed. Getting real about living longer The Green Paper also underlines that we must be realistic about the future retirement age. Old age is no longer synonymous with poverty and this is certainly one of the great successes of Europe s social model. But if we want to continue to deliver on this promise, we must recognise that as we live longer and longer, we face trade-offs: pensioners who are poorer relative to earnings, higher contributions or more people working more and longer. The Green Paper discusses statutory pensionable ages and effective labour market exit ages. But achieving the sustainable balance between time spent in work and in retirement is not only about increasing the time spent at work at the end of the career. It is also important that workers spend more time in jobs with wages and working hours entitling them to future pension rights. There is a clear link here to the EU s Europe 2020 strategy which emphasises higher and better quality employment and positive transitions: both are decisive for all workers to accrue pension rights. Of course, higher employment rates must be facilitated. Health and safety at work must continue to be improved. Flexibility, training opportunities for older workers and addressing age discrimination are also key and are already being supported by the EU through the European Social Fund. Successful pension reforms will contribute towards reaching the Europe 2020 goals for employment, higher growth and long-term sustainability of public finances, as well as addressing adequacy gaps, thereby helping to achieve the Europe 2020 poverty reduction target - because adequate and sustainable pensions and our employment and poverty targets are mutually reinforcing. The wide impact of changing labour markets Considering both the opportunities and constraints of labour markets is vital when reflecting on how to extend contributory working lives. But it is also crucial to acknowledge that changing labour markets can affect pension adequacy. More individuals are faced with broken careers, moving in and out of full-time work and often starting with short-term contracts. The impact on pension entitlements for such individuals must be considered. A further change in the labour market is the move towards more flexibility and in particular higher mobility across sectors and between countries. Increased free movement is a solid achievement of the European project, but the reality is that there are still barriers. One such barrier lies in pensions. Social security pensions are co-ordinated by EU regulations to help make sure that people moving between EU countries are not disadvantaged. But supplementary pensions are only covered by separate and rather minimal rules, meaning that people can still lose out. The Commission hopes the consultation will provide new impetus to find a more comprehensive solution. The Green Paper recognises the increasing reliance on both supplementary and funded pensions, and in particular the move towards more coverage by defined contribution (DC) schemes. Defined benefit and defined contribution schemes both have their advantages and disadvantages. A move towards more DC provision also entails shifting much of the investment, inflation and longevity risk onto the individual. The implications of this shift are important and need to be well understood: what information does the individual need in order to make the right decision? Could regulation or default positions help? How should the pay-out phase be designed? We must of course remember that investment risk cannot be reduced without a potential cost: there is always a trade-off. But one other risk is that of under-saving for retirement when saving becomes a voluntary matter, it is important that individuals understand that they need to take responsibility and do so early. The case for good regulation Good regulation makes a difference as it supports economic activity along a stable growth path. Poorlydesigned regulation would place an unjustified burden on pension funds and employers, thereby undermining economic efficiency. We need to ensure that funded pensions stand up to major financial crises and that regulation does not push employers into insolvency or into abandoning pension schemes. There are still considerable barriers to cross-border activity in the field of pensions and the Green paper highlights that the Directive on Institutions for Occupational Retirement Provision (IORP) might therefore need to be reviewed. Furthermore, some funded pension schemes are covered by EU regulation, while others are not. Similar schemes can be covered by different EU rules and the boundaries can be unclear. Just as individuals would like to have clarity about what their future retirement will look like, pension providers also need to plan for the long term with as much certainty as possible, therefore these regulatory gaps will need to be looked into. Social Agenda November